FHA Home Loan Changes- Pushed Back, But Loom Large

FHA Home Loan Changes-

Pushed Back, But Loom Large

This next week was supposed to mark additional changes to lending standards by the Federal Housing Administration to their home loan standards. However, for the second time, the FHA has pushed back the date of these changes, originally set to go into effect on October 1^st, to December 7^th, 2009.

The major changes that we are supposed to see with these new revised rules most affect condominium financing through the FHA. The proposed changed would include the following:

The elimination of "Spot approvals" , as the entire condominium project has to meet FHA approval before a borrower can get an FHA-insured mortgage.

30 percent of the units maximum will be allowed to have FHA-insured mortgages.

50% of the units in a new complex will need to be sold before the FHA will insure a mortgage on a condo sold.

50% of the units in a project must be owner occupied.

However, the new rules do allow for some flexibility as well in the approval process of condo complexes and that is where the delay in releasing these new rules may stem from. The indication in the initial update is that Direct Endorsement Lenders can approve an entire project (not an individual spot approval ) and therefore allow a buyer to purchase a condo unit in that project using an FHA loan. However, it has been argued that this puts too much responsibility on Direct Endorsement Lenders and Underwriters and thus may be revised for the final rules being released December 7^th.

As always we will provide additional information and analysis as it becomes available on these latest proposed regulation changes.

For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos and Carlos Felix of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com